EPF interest rate hiked to 8.80 per cent

Chennai: Interim interest rate for EPF subscribers has been increased to 8.80 per cent for 2015-2016 from 8.75 per cent from last year, said Union minister of state for labour and employment Bandaru Dattatreya on Tuesday.

He said the decision was taken at the 211th meeting of Central Board of Trustees, Employees' Provident Fund, here. The Union ministry of labour and employment, Central and state government officials and office-bearers of seven trade unions participated.

Addressing presspersons after the meeting, he said that the decision was taken in the interest of nation and EPF subscribers. The interim interest rate would be given to subscribers for available EPF principal amount of Rs 34,844 crore during 2015-2016. A total of four crore workers and 8.6 lakh employers were registered with  EPF.

He said the recommendation would be sent to the Central government after obtaining report from financial advisors and audit reports. Considering these factors and other issues, the Central government would notify the rate in a few months.

Keeping in view global recession and RBI norms, the interim interest rate has been fixed at 8.80 per cent and this would enable the Centre to have a surplus amount of Rs 673 crore after the interest payment. The implementing recommendation of VII Pay Commission and reduction of interest rate were also taken note of during the discussion.

The minister said EPF has Rs 30,000 crore under the inoperative account category and these accounts were not in operation for the past three years. The government will not divert the amount to other purpose and efforts will be taken to disburse the amount to the EPF subscribers after allotting Universal Account Number (UAN). So far, the government had completed allotting UAN to 2.23 crore EPF subscribers.

Opposing the interim interest rate, trade union leaders, who took part in the meeting, requested the government to hike the interest rate up to 8.95 per cent and after the interest payment government will have a surplus of Rs 91 crore.
Vice-President, Bharathiya Mazdoor Sangh, Prabhakar J. Banasure said Prime Minister Narendra Modi and RBI have been stating that the country's economy has been improving steadily.

“There is no locus standi for the government to hold the amount of workers”, he said. Secretary  Sukhdeo Prasad Mishra requested the government to consider medical insurance scheme to pensioners.